Now, mobile body moves SC over RBI’s crypto ban

BENGALURU: Joining the fight against the Reserve Bank of India’s decision to not allow banks to provide services to cryptocurrency trading platforms, the Internet and Mobile Association of India (IAMAI) has filed a writ petition in the Supreme Court to put a stay on the regulator’s order.

This is the fifth such petition to be filed against the RBI on its order dated April 6, when it disallowed regulated entities from dealing in virtual currencies or offering services to entities dealing with them. The regulator has given banks a deadline of July 6 to adhere to the new rule.

IAMAI’s petition was filed in the apex court on Tuesday, as per the Supreme Court website. IAMAI president Subho Ray confirmed the filing of the petition, but did not want to comment till the matter was scheduled for hearing.

RBI did not respond to specific queries about this petition.

ET reported earlier this week about another writ petition filed by a group of 11 different representatives from various crypto-related businesses challenging the constitutional validity of the RBI’s decision.

Separately, two petitions are also set to be heard by the Delhi High Court, filed by cryptocurrency exchanges Kali Digital Eco-systems and Moneytradecoin, opposing the RBI rule. Last week, another joint writ petition was filed by four cryptocurrency exchanges in the apex court against the RBI order.

While cryptocurrency exchanges were already feeling the heat over the last several months following RBI’s circular cautioning the public against dealing with virtual currencies and the government reiterating during the Budget that cryotocurrencies were not legal tender, the new RBI rule has had further impact. “Since the new rule, the number of new users registering on our platform has halved,” said Sathvik Vishwananth, CEO of Blume Ventures-backed Unocoin. The exchange was adding about 1,000 new users a day in the month of March, and the figure has since fallen to less than 500, he said. The regulatory hostility is also prompting cryptocurrency exchanges to take the decision to move to friendlier markets.

Last year, several cryotcurrency exchanges had come together to form an industry body called the Digital and Blockchain Foundation of India in order to liaise with the government and the regulator. The association was later merged with IAMAI in November 2017. Crypto-exchanges part of IAMAI include some of the largest players in the industry including Unocoin, Zebpay and Conisecure.

The finance ministry’s Department of Economic Affairs had constituted an interdisciplinary committee last year to examine virtual currencies.

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